Jou nal o Indus ial Enginee ing and Managemen
JIEM, 2015 – 8(5): 1602-1622 – Online ISSN: 2013-0953 – P in ISSN: 2013-8423
h p://dx.doi.o g/10.3926/jiem.1616
Online Channel Ope a ion Mode: Game Theo e ical Analysis
om he Supply Chain Powe S uc u es
Song Huang, Guocan Chen, Yanan Ma*
College o Economics & Managemen , Sou h China Ag icul u al Uni e si y (China)
[email p o ec ed], [email p o ec ed], *Co esponding au ho : mayan[email p o ec ed]
Recei ed: July 2015
Accep ed: No embe 2015
Abs ac :
Pu pose:
Dual-channels ha e been widely used in p ac ice, and he p icing decisions and he
online channel ope a ion mode choice ha e been he co e p oblems in dual-channel supply
chain managemen . This pape ocuses on he online channel ope a ion mode choice om he
supply chain powe s uc u es based on game heo e ical analysis.
Design/me hodology/app oach:
This pape u ilizes h ee kinds o game heo e ical models
o analyze he impac o supply chain powe s uc u es on he op imal p icing and online
channel ope a ion mode choice.
Findings:
Resul s de i ed in his pape indica e ha when he sel -p ice elas ici y is la ge, he
powe s uc u es ha e no di ec impac on he decisions. Howe e , when he sel -p ice elas ici y
is small and cus ome s’ p e e ence o he online channel is low, hen in he MS ma ke , i is
be e o he e aile o ope a e he online channel, while in he RS ma ke o in he VN
ma ke , i is be e o he manu ac u e o ope a e he online channel.
Resea ch limi a ions/implica ions:
In his pape , we do no conside s ochas ic demand and
asymme ic in o ma ion, which may no well sui he eali y.
O iginali y/ alue:
This pape p o ides a di e en pe spec i e o analyze he impac o supply
chain powe s uc u es on he p icing decisions and online channel ope a ion mode choice. The
compa ison o hese wo online channel ope a ion modes in his pape is also a unique poin .
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Keywo ds:
supply chain managemen , powe s uc u es, online channel, game heo y
1. In oduc ion
The pas wo decades has wi nessed he popula i y o he online elec onic channels. Now mo e
and mo e cus ome s a e accus omed o pu chasing p oduc s online, which induces an
inc easing numbe o e aile s o manu ac u e s o in oduce he online channels in o hei
adi ional ma ke ing channels. I is epo ed ha on No embe 11 h, 2014, he ade olume
o Tmall.com, a pla o m o local Chinese and in e na ional businesses o sell b and name
goods o consume s, is up o 35 billion Yuan. The con enience o online paymen and p omp
logis ics dis ibu ion join ly con ibu e o he popula i y online channels. Th ough online
channels, i ms can p ocess cus ome s’ o de s, con ol he dis ibu ion and p icing o goods,
ha e a g ea e unde s anding o cus ome s’ p e e ence (Mukhopadhyay, Zhu & Yue, 2008). I
is epo ed ha abou 42% o he op supplie s such as IBM, Nike, Pionee Elec onics, Es ee
Laude , and Dell, a e selling o cus ome s h ough online channels (Chiang, Chhajed & Hess,
2003; Tsay & Ag awal, 2004).
Though he impo ance o in oducing online channels has been widely ecognized, which pa y
should ope a e he online channels is no e y clea . In p ac ice, some manu ac u e s choose o
open online channels o hei own, while o he s mainly ely on hei downs eam e aile s o
ope a e he online channels. Fo example, Suning, one o he la ges appliance e aile s in
China, sells he appliance bo h h ough he b icks and mo a and online channel. While Dell,
one o he la ges compu e manu ac u e s in he wo ld, ope a es bo h he e ail channel and
he online channel. A na u al ques ion eme ges as o why di e en supply chains ha e
di e en online channel ope a ion modes? Wha ac o s impac he supply chain’s online
channel ope a ion mode choice?
To answe hese ques ions, we conside a wo-echelon supply chain composed o one
manu ac u e and one e aile . Suppose ha he supply chain is now conside ing
in oducing he online elec onic channel. We conside h ee di e en supply chain powe
s uc u es. In he manu ac u e dominan ma ke , he manu ac u e ac s as he
S ackelbe g leade and he e aile he ollowe . In he e aile dominan ma ke , he
e aile mo es i s as he S ackelbe g leade and he manu ac u e ollows as he ollowe .
I he manu ac u e and he e aile ha e iden ical powe , hey mo e simul aneously. We
compa e he o al p o i s o he supply chain unde wo di e en online channel ope a ion
modes: he manu ac u e ope a ing he online channel e sus he e aile ope a ing he
online channel, unde hese h ee di e en supply chain powe s uc u es. We ind ha he
online channel ope a ion mode choice is join ly a ec ed by cus ome s’ p e e ence o he
online channel, he sel -p ice elas ici y and he supply chain powe s uc u es. When he
sel -p ice elas ici y is la ge, powe s uc u es ha e no di ec impac on he online channel
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mode choice. Howe e , when he sel -p ice elas ici y is small and cus ome s’ p e e ence o
he online channel is low, in he MS ma ke , i is be e o he e aile o ope a e he online
channel, while in he RS and VN ma ke s, i is be e o he manu ac u e o ope a e he
online channel.
This pape alls in o he dual-channel supply chain managemen . The channel s uc u e
composed o bo h he adi ional o line e ail channel and he online elec onic channel is
called he dual-channel. When he manu ac u e opens he online channel, his phenomenon is
called manu ac u e enc oachmen (A ya, Mi endo & Sapping on, 2007; Li, Gilbe & Lai,
2013, 2015; Li, Xie & Zhao, 2015). The manu ac u e enc oachmen may cause se e e channel
con lic , because he manu ac u e becomes he compe i o o he downs eam e aile . Some
li e a u e on dual-channel supply chain managemen ocuses on he coo dina ion mechanism
o alle ia e he po en ial channel con lic . Tsay and Ag awal (2004) s udy he channel con lic
and coo dina ion be ween he manu ac u e and he e aile in a dual-channel supply chain.
Mukhopadhyay e al. (2008) p o ides a way o alle ia e he channel con lic when he e aile
is able o add alue o he p oduc . Yan (2008) in es iga es he s a egic ole o p o i sha ing
and inds ha bo h pa ies will bene i om a dual-channel p o i sha ing s a egy. Chiang e
al. (2003) and Chen, Kaya and Öze (2008) s udy he p icing decisions be ween a
manu ac u e and a e aile in a dual-channel supply chain based on consume choice beha io .
Cai (2010) s udies he in luence o channel s uc u es and p icing schemes on he dual-channel
supply chain. Chen, Zhang and Sun (2012), Xu, Dan, Zhang and Liu (2014), s udy he
coo dina ion con ac design in a manu ac u e S ackelbe g dual-channel supply chain.
Some li e a u e in oduces o he decision a iables in o he dual-channel supply chain. Hua,
Wang and Chen (2010) and Xu, Liu and Zhang (2012) s udy he p icing and lead ime
decisions in a dual-channel supply chain. Dan, Xu and Liu (2012) s udy he p icing and e ail
se ice decisions in a dual-channel supply chain. Huang, Yang and Zhang (2012) and Huang,
Yang and Liu (2013) s udy he p icing and p oduc ion decisions in a dual-channel supply chain
when he supply chain expe iences demand dis up ion and p oduc ion cos dis up ion,
espec i ely. Zhang, Xiong and Xiong (2015) s udy he coo dina ion issue when a dual-channel
supply chain expe iences demand dis up ion o p oduc ion cos dis up ion. Cao (2014) and
Cao, Zhou and Lϋ (2015) s udy he channel coo dina ion a e demand dis up ion and
p oduc ion cos dis up ion. Cao, Ma, Wan and Lai (2013) s udy he con ac design p oblem in
a dual-channel supply chain wi h asymme ic cos in o ma ion.
This pape is mos ly ela ed o he li e a u e in dual-channel supply chain managemen when
conside ing di e en supply chain powe s uc u es. Zhang, Liu and Wang (2012) s udy he
e ec o p oduc subs i u abili y and ela i e channel s a us on he op imal p icing decisions
unde di e en supply chain powe s uc u es. In hei model, he online channel is ope a ed
by he manu ac u e . Chen, Wang and Jiang (2015) in es iga e he impac o supply chain
powe s uc u e on he O2O mixed dual-channel, whe e he e aile ope a es bo h he o line
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e ail channel and he online elec onic channel. Wang, Niu and Guo (2013) in es iga e a
supply chain comp ising an o iginal equipmen manu ac u e and a con ac manu ac u e ,
whe e he con ac manu ac u e ac s as bo h ups eam pa ne and downs eam compe i o o
he o iginal equipmen manu ac u e . The wo pa ies engage in one o h ee Cou no
compe i ion games: a simul aneous game, a sequen ial game wi h he o iginal equipmen
manu ac u e as he S ackelbe g leade , and a sequen ial game wi h he con ac manu ac u e
as he S ackelbe g leade . Based on hese h ee games, hey in es iga e he wo pa ies’
S ackelbe g leade ship/ ollowe ship decisions. Though he e a e al eady some li e a u e
add essing he p icing decisions unde di e en supply chain powe s uc u es, he e is li le
esea ch on which supply chain pa y should ope a e he online channel. Because he online
channel ope a ion mode choice will a ec he supply chain’s op imal p icing decisions, which
will e en ually impac he op imal p o i s o di e en pa ies, i is necessa y o inco po a e he
supply chain powe s uc u es in o he supply chain’s op imal online channel ope a ion mode
choice.
The es o he pape is o ganized as ollows. Sec ion 2 p esen s he model se up. Sec ion 3
analyzes he scena io o he manu ac u e S ackelbe g ma ke . Sec ion 4 analyzes he scena io
o he e aile S ackelbe g ma ke . In sec ion 5, he scena io o he e ical Nash ma ke is
analyzed. In he h ee di e en ma ke s uc u es, we de i e he supply chain’s op imal p icing
decisions and he p o i s o di e en supply chain pa ies. A las , we compa e he supplie
chain’s p o i s unde wo di e en online channel ope a ion modes unde di e en supply chain
powe s uc u es. Sec ion 6 summa izes he esul s.
2. Model Se up
Conside a supply chain composed o one manu ac u e and one e aile . The e a e wo selling
channels, one is he adi ional o line e ail channel, and he o he is he online elec onic
channel. In he o line e ail channel, he manu ac u e sells he p oduc o he e aile a
wholesale p ice w, who hen se es he end cus ome s a o line e ail p ice p . In he online
channel, we conside wo kinds o online channel ope a ion modes. In he i s mode, he
manu ac u e ope a es he online channel and sells p oduc s di ec ly o end cus ome s a
online e ail p ice pe, which is depic ed in Figu e 1. This channel s uc u e is also called he
adi ional dual-channel in ope a ions managemen li e a u e (Hua e al., 2010). The
manu ac u e simul aneously de e mines he wholesale p ice w and he online e ail p ice pe,
and he e aile de e mines he o line e ail p ice p .
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Figu e 1. Manu ac u e ope a es he online channel
In he second mode, he e aile ope a es he online channel and se es end cus ome s
h ough bo h he o line channel and he online channel, which is depic ed in Figu e 2. This
channel s uc u e is also called he online- o-o line dual-channel in ope a ions managemen
li e a u e (Chen e al., 2015). As mo e and mo e gian e aile s choose o open online channels
o sell p oduc s, his dual-channel s uc u e is also e y popula in p ac ice. The manu ac u e
should de e mine he wholesale p ice w, and he e aile should simul aneously de e mine he
o line e ail p ice p and he online e ail p ice pe. Fo analy ical simplici y, ollowing A ya e al.
(2007) and Zhang e al. (2012), we no malize he uni p oduc ion cos o he manu ac u e
and he selling cos o ze os.
Figu e 2. Re aile ope a es he online channel (Chen, Wang and Jiang, 2015)
Fo model simplici y, we assume ha he demands in he wo channels a e linea in sel -p ice
and c oss-p ice elas ici y. This assump ion is e y common in ope a ions managemen
li e a u e (Raju & Abhik, 2000; Yue & Liu, 2006; Ku a a, Yao & Liu, 2007; Huang &
Swamina han, 2009; Hua e al., 2010; Huang e al., 2012; Huang e al., 2013; Chen e al.,
2015). We u he assume ha he sel -p ice elas ici y and he c oss-p ice elas ici y a e
symme ic (Zhang e al., 2012; Chen e al., 2015).
The demand in he wo channels, he o line channel and he online channel, a e gi en by he
ollowing equa ions
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(1)
(2)
whe e he subsc ip and e deno e he o line e ail channel and he online elec onic
channel, espec i ely. The demand unc ions in Equa ions (1) and (2) indica e ha he
demands in he wo channels bo h depend on he o line e ail p ice p and he online e ail
p ice pe. The pa ame e
ep esen s he base ma ke demand le el. The pa ame e
cap u es cus ome s’ p e e ence o he online channel. The la ge
is, he mo e in ense he
channel con lic is (Hua e al., 2010; Huang e al., 2012). The pa ame e
is he coe icien
o he sel -p ice elas ici y o i s own channel, and he pa ame e
is he coe icien o he
c oss-p ice elas ici y o he opposi e channel. Assume
>
, so he p ice elas ici y o he own
channel is g ea e han he c oss-p ice elas ici y o he opposi e channel (Hua e al., 2010;
Huang e al., 2012).
We conside h ee di e en supply chain powe s uc u e models, i.e., he manu ac u e
S ackelbe g model, he e aile S ackelbe g model and he e ical Nash model. In he
manu ac u e S ackelbe g model, he manu ac u e mo es i s ac ing as he S ackelbe g
leade and hen he e aile ollows ac ing as he S ackelbe g ollowe . In he e aile
S ackelbe g, he e aile mo es i s ac ing as he S ackelbe g leade and hen he
manu ac u e ollows ac ing as he S ackelbe g ollowe . In he e ical Nash model, bo h he
manu ac u e and he e aile mo e simul aneously. In he h ee di e en supply chain powe
s uc u es, we conside wo ypes o online channel ope a ion modes, i.e., he manu ac u e
ope a ing he online channel e sus he e aile ope a ing he online channel. Unde hese
h ee di e en supply chain powe s uc u es, we concen a e on he analysis o he op imal
p icing, as well as he compa ison o he supply chain’s pe o mance, unde he wo online
channel ope a ion modes.
Ou analysis is mos ly ela ed o Chen, Wang and Jiang (2015) and Huang, Yang and Zhang
(2012), bu wi h a di e en mo i a ion. We would like o compa e he pe o mance o he wo
online channel ope a ion modes and s udy which mode is supe io . In o de o make he pape
sel -con ained, we use some esul s om Chen, Wang and Jiang (2015) and Huang, Yang and
Zhang (2012) as he e e ences. We lis hei esul s as lemmas h oughou he pape .
3. Manu ac u e S ackelbe g (MS) Model
In his sec ion, we conside he manu ac u e S ackelbe g ma ke . In he MS ma ke , he
manu ac u e ac s as he S ackelbe g leade and he e aile he S ackelbe g ollowe . We
conside wo ypes o online channel ope a ion modes, espec i ely.
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3.1. The Manu ac u e Ope a ing he Online Channel
The sequence o he e en s is as ollows:
(1) The manu ac u e i s announces he wholesale p ice w and he online e ail p ice pe;
(2) The e aile hen announces he o line e ail p ice p gi en he manu ac u e ’s p icing
decisions;
(3) Finally, cus ome demand is esol ed and he p o i s a e ealized acco ding o he
announced p ices.
In he MS ma ke wi h he manu ac u e ope a ing he online channel, he e aile ’s p o i
maximiza ion p oblem is de e mined by
(3)
and he manu ac u e ’s p o i unc ion is de e mined by
(4)
whe e he subsc ip R and M deno es he e aile and manu ac u e , espec i ely, h oughou
he pape . We sol e his p oblem by backwa d induc ion. Fi s , gi en he wholesale p ice w and
online e ail p ice pe de e mined by he manu ac u e , we ob ain he e aile ’s op imal
esponsi e p icing decision, and hen we sol e he manu ac u e ’s op imal wholesale p ice w
and online e ail p ice pe.
The ollowing lemma, which is p esen ed in Huang, Yang and Zhang (2012), cha ac e izes he
op imal p icing decisions and p o i s in he MS ma ke wi h he manu ac u e ope a ing he
online channel.
Lemma 1 (Huang, Yang and Zhang, 2012). In he MS decen alized dual-channel supply
chain wi h he manu ac u e ope a ing he online channel, he op imal p icing decisions a e:
(5)
And he supply chain’s op imal p o i is
(6)
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[ ]
( )
max ( , ) (1 )
MS
M e e e e
w p w p p p p p
p q a b q a b
= - - + + - +
2 2 2 2 2
2
2 2
4 8 (1 ) (3 )(1 )
16 ( )
MS
SC
a ab a b
p q
a a b
+ - + + -
=-
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3.2. The Re aile Ope a ing he Online Channel
The sequence o he e en s is as ollows:
(1) The manu ac u e i s announces he wholesale p ice w;
(2) The e aile hen announces he o line e ail p ice p and he online e ail p ice pe, gi en
he manu ac u e ’s p icing decisions;
(3) Finally, cus ome demand is esol ed and he p o i s a e ealized acco ding o he
announced p ices.
In he MS ma ke wi h he e aile ope a ing he online channel, he e aile ’s p o i unc ion is
de e mined by
(7)
whe e he i s e m is he e aile ’s p o i om he o line channel and he second e m is he
p o i om he online channel.
And he manu ac u e ’s p o i unc ion is de e mined by
(8)
The ollowing lemma, p esen ed in Chen, Wang and Jiang (2015), cha ac e izes he op imal
p icing decisions in he MS ma ke wi h he e aile ope a ing he online channel.
Lemma 2 (Chen, Wang and Jiang, 2015). In he MS decen alized dual-channel supply
chain wi h he e aile ope a ing he online channel, he op imal p icing decisions a e:
(9)
And he supply chain’s op imal p o i is
(10)
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2 2
2
2 2
2 (1 ) (1 ) 1
32( )4( )
MS
SC
a b a q
a ba b
é ù
+ - + -
P = -
ê ú
--
ë û
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3.3. Compa ison Analysis
The abo e wo subsec ions analyze he op imal p icing decisions and he supply chain
pe o mances o he wo online channel ope a ion modes, espec i ely. In subsequen , we
would like o analyze, om he pe spec i e o he supply chain, which online channel ope a ion
mode is mo e e icien in he MS ma ke . The ollowing p oposi ion cha ac e izes he esul .
P oposi ion 1. I , hen , o he wise, .
P oo . F om he esul s in Lemma 1 and Lemma 2, we ha e
(11)
I he cus ome s’ p e e ence o he online channel sa is y , hen
, o he wise, . Thus, he esul s can be easily ob ained.
The ollowing co olla y cha ac e izes he impac o cus ome s’ p e e ence on he online channel
on he supply chain’s op imal p icing decisions.
Co olla y 1. (1) ; (2) i and only i
≥ 1/2; (3) i and only i
.
P oo . Compa ing he esul s in Lemma 1 and Lemma 2, we ha e: (1) ;
(2) , which is nonnega i e i an only i
≥ 1/2; (3) ,
hen he esul s can be easily ob ained.
P oposi ion 1 indica es ha , in he MS ma ke , i cus ome s’ p e e ence o he online channel
is low, hen om he pe spec i e o he supply chain, i is be e o he manu ac u e o
ope a e he online channel. O he wise, i is be e o he e aile o ope a e he online channel.
The in ui ion is as ollows. When cus ome s’ p e e ence o he online channel is low, he
e aile knows mo e abou cus ome s’ channel p e e ence and is in an ideal posi ion o
in oduce he online channel o he cus ome s. Fo example, when a cus ome goes in o
Suning Appliance o buy a e ige a o , ob iously, he may no know he possibili y o buying
appliances online o jus p e e o buy on spo . In o de o encou age he cus ome o
pu chase online a suning.com, Suning o e s cus ome s coupons which can be used o o he
u u e o de s made online a suning.com. In o he wo ds, e aile s can make ull use o he
ad an age o con ac ing cus ome s o in oduce he online channel. When cus ome s’
p e e ence o he online channel is high, he manu ac u e should ope a es he online channel,
his is because om Co olla y 1 we know ha , when
is la ge, , which means ha he
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2 2 2 2 2 2 2 2
2 2 2 2
2
2 (1 ) (1 ) 2 4 (1 ) ( )(1 ) (1 )
2 2
1
32( ) 16
4( ) 8 ( )
2( )(1 ) 2
32 ( )
MS MS
SC SC
a b a a ab a b
a b a
a b a a b
a b a
a a b
p q q
q
+ - + - + - + + - -
-
- -
- - -
-
é ù é ù
P - = - - +
ë û ë û
=
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We nex summa ize he main esul s in P oposi ion 1, P oposi ion 3 and P oposi ion 5 in he
ollowing Table 1.
MS RS VN
b
<
a
≤ 2
b
Re aile Manu ac u e Manu ac u e
b
<
a
≤ 2
b
Manu ac u e Manu ac u e Manu ac u e
a
> 2
b
Re aile Re aile Re aile
a
> 2
b
Manu ac u e Manu ac u e Manu ac u e
Table 1. Manu ac u e s. e aile ope a ing he online channel in di e en powe s uc u es
F om Table 1, we ind ha he online channel ope a ion mode is a ec ed by cus ome s’
p e e ence o he online channel, he sel -p ice elas ici y and he supply chain powe
s uc u es. When he sel -p ice elas ici y is la ge, he supply chain powe s uc u e has no
impac on he online channel model. Only cus ome s’ p e e ence o he online channel impac s
he supply chain’s op imal decision. When cus ome s’ p e e ence o he online channel is low,
i is be e o he e aile o ope a e he online channel, o he wise, i is be e o he
manu ac u e o ope a e he online channel. Howe e , when he sel -p ice elas ici y is small,
hen i cus ome s’ p e e ence o he online channel is high, hen i ’s be e o he
manu ac u e o ope a e he online channel, no ma e wha he supply chain powe s uc u e
is. Howe e , when cus ome s’ p e e ence o he online channel is low, hen in he MS ma ke ,
i is be e o he e aile o ope a e he online channel, while in he RS ma ke and he VN
ma ke , i is be e o he manu ac u e o ope a e he online channel.
The esul s in Table 1 imply ha he wo channel s uc u es, RS and VN, ha e no di ec impac
on he online channel ope a ion mode choice. Howe e , i does con ey some impo an
messages. When he e aile s a e mo e powe ul o equal powe ul compa ed wi h he
manu ac u e s, mos o he ime he online channel should be ope a ed by he manu ac u e s.
This may be an e icien way o alle ia e he double ma ginaliza ion e ec caused by
decen alized decisions. Bu his is no always he case, especially when he c oss-p ice e ec
is low and cus ome s’ p e e ence o he online channel is low. A his ime, he e aile should
ope a e he online channel by he sel . The e o e, when a manage plans o in oduce he online
channel in o he ex an channel con igu a ion, he should simul aneously conside h ee key
ac o s, cus ome s’ p e e ence o he online channel, he ad e se impac o he online channel
on he demand o he adi ional e ail channel, as well as he supply chain powe be ween he
e aile and he manu ac u e . The e aile should be e y cau ious o open an online channel
and ope a e i by he sel . Because in mos cases, he ope a ion e iciency o he e aile
ope a ing he online channel mode is lowe han ha o he manu ac u e ope a ing he online
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channel mode. This is pa allel wi h eal business si ua ions. Though some e aile s ha e aken
on he online- o-o line channel s a egy, howe e , in p ac ice, mos o he online channels a e
ope a ed by he manu ac u e s. The esul s in Table 1 may gi e an explana ion why mos o
he online channels a e ope a ed by he manu ac u e s.
6. Concluding Rema ks
The in oduc ion o online channel can be bene icial o he supply chain, because i can each
mo e cus ome s, which canno be achie ed by he adi ional single channel. Hence, mo e and
mo e supply chain sys ems ha e been in oducing he online channels in o hei adi ional
supply chain channel con igu a ions. Howe e , hough he e is much li e a u e on how o p ice
a dual-channel supply, how o coo dina e he dual supply chain, as well as how o imp o e he
dual-channel supply chain wi h o he pe o mance-imp o ing conside a ions, he ques ion on
which pa y should ope a e he online channel is no well add essed. In his pape , we add ess
he online channel ope a ion mode decision, i.e., when conside ing opening an online elec onic
channel, which pa y should ope a e he online channel. We conside he p oblem om he
pe spec i e o supply chain powe s uc u es. We conside h ee di e en supply chain powe
s uc u es, which a e he manu ac u e S ackelbe g, he e aile S ackelbe g and he e ical
Nash. By using he noncoope a i e game heo y, we ob ain he op imal p icing decisions and
op imal p o i s o he manu ac u e , he e aile and he supply chain. We hen compa e he
supply chain’s o al p o i s unde di e en scena ios.
We ind ha he online channel ope a ion mode is signi ican ly a ec ed by cus ome s’
p e e ence o he online channel and he sel -p ice elas ici y in di e en supply chain powe
s uc u es. When he sel -p ice elas ici y is e y la ge, i cus ome ’s p e e ence o he online
channel is low, hen i is be e o he e aile o ope a e he online channel, o he wise, i is
be e o he manu ac u e o ope a e he online channel. Howe e , when he sel -p ice
elas ici y is small, hen i cus ome s’ p e e ence o he online channel is high, hen i ’s be e
o he manu ac u e o ope a e he online channel. Howe e , when cus ome s’ p e e ence o
he online channel is low, hen in he MS ma ke , i is be e o he e aile o ope a e he
online channel, while in he RS ma ke and in he VN ma ke , i is be e o he manu ac u e
o ope a e he online channel.
The con ibu ions o he pape a e wo- old. On he one hand, he esul s in his pape may
help business manage s o make p ope online channel ope a ion mode decisions. When
making decisions as o in oducing an online channel, he decision-make should ake in o
conside a ions he supply chain powe s uc u es, cus ome s’ p e e ence o he online channel
and he c oss-p ice elas ici y. Igno ance o one o hese ac o s may lead o subop imal
decisions. On he o he hand, he op imal p icing decisions a e also p esen ed in he pape , and
he supply pa ies’ op imal p o i s, as well as he o al supply chain’s p o i , a e ob ained. In
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p ac ice, we ind ha he e a e some supply chains wi h he e aile s ope a ing he online
channel, while o he s wi h he manu ac u e s ope a ing he online channel, howe e , he
unde lying eason is no ye e y clea . The esul s o his pape may gi e some analy ical
explana ions o some ex en . Admi edly, he esul s ob ained in his pape a e based on some
s ylized game heo e ical models which only cap u e some impo an pa ame e s in eal
si ua ions. In p ac ice, as o which pa y should ope a e he online channel, he e a e some
o he ac o s ha mus also be aken in o conside a ion, such as he expe ience o channel
managemen , he in es men o in o ma ion in as uc u e, and some speci ic p ope ies o he
p oduc s, and so on. I seems mo e bene i ing o inco po a e hese ac o s in o he s ylized
game heo e ical modes, and some imes his may leads o in ac able models. Consequen ly,
we choose o ocus on he impac o supply chain powe s uc u es on he online channel
ope a ion mode choice.
Some ex ensions a e possible o conduc based on his pape . Fi s , he scena io o s ochas ic
demand can be inco po a ed in o he cu en esea ch amewo k. Second, he asymme ic
in o ma ion abou he ma ke demand can also be conside ed, and some in e es ing esul s
may be ob ained. Thi d, he isk a i ude o he supply chain pa ies can be u he conside ed.
These ex ensions a e in e es ing wo k in he u u e.
Acknowledgemen s
This esea ch is suppo ed in pa by he Na ional Na u al Science Founda ion o China unde
G an 71301055, The You h Fund o Humani ies and Social Science o Minis y o Educa ion o
China (13YJC630054), and Na u al Science Founda ion o Guangdong P o ince, China
(S2013040016248).
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